Intraday Market Thoughts

USD Stabilizes on Consumer Confidence

by Adam Button
Aug 29, 2018 11:51

A jump in consumer confidence to the best levels since 2001 lifted the US dollar Tuesday. The Swiss franc was the top performer while the Australian dollar lagged. GDP numbers are a focus in the day ahead. The revised Q2 GDP is up next.

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The US dollar has been retreating over the past two weeks on the combination of diminished emerging market worries and dovish comments from Powell but economic data reversed the trend partway through Tuesday's trade. That's when US consumer confidence from the Conference Board was reported at 133.4 compared to 126.4 expected. The sub-indexes were equally impressive, hitting highs dating back to the turn of the millennium.

The dollar was slow to respond initially but slowly and steadily gathered momentum. Cable had been as high as 1.2935 but fell to 1.2868 and closed near session lows. Gold also fell $10 in an outside reversal day.

The turn in the dollar also came with a rise in Treasury yields. The 10-year note moved up to 2.88% from 2.84% and that will be the place to measure the sustainability of the rally in the days ahead. Signs on trade will remain the underlying driver but also mind risks from month end flows.

Up next, the US presents a second look at Q2 GDP at 1230 GMT. Those won't be major market movers but they will help to frame the narrative.

Act Exp Prev GMT
CB Consumer Confidence
133.4 126.6 127.9 Aug 28 14:00

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